In 2010, Frank Ahrens, an 18-year veteran of the Washington Post, put his journalistic talents to new use when he took a job in South Korea as the Director of Global PR at Hyundai Motor.
After two years, his work in rolling out Hyundai’s audacious rebranding effort earned him a promotion to Vice President, making Ahrens the highest-ranking foreign executive at Hyundai headquarters.
His three-year experience with the firm formed the basis of his 2016 book, Seoul Man: A Memoir of Cars, Culture, Crisis, and Unexpected Hilarity Inside a Korean Corporate Titan.
Ahrens has since resettled in Washington DC, where he works at a PR firm, pens a twice-monthly column for Forbes, and runs a consulting practice called Corporate Confucianism aimed at helping companies bridge the corporate culture divide between East and West.
We recently caught up with Frank Ahrens to talk about his public relations work at Hyundai, the forming of the Genesis brand and life as the sole American at Hyundai global headquarters in Seoul.
Hyundai was initially trying to “haul the entire brand upmarket”, though later they decided to spin Genesis off as a stand-alone luxury brand. Looking back, how successful have those efforts been in your view? What’s your sense of the evolution of Hyundai’s brand perception since you started working there in 2010?
I think Hyundai’s brand perception peaked in the months following the introduction of DH Genesis in Korea in December 2013. DH was well-received. There was the feeling that Hyundai could build a legit luxury sports sedan and might be able to pull off this elevate-the-brand plan.
But in the years after that, the bad news started rolling in in waves: The company overpaid for downtown Seoul land for its new headquarters and – even more damaging – the Hyundai Motor board of directors approved the purchase without even being told the price of the land by the chairman. This confirmed all the worst perceptions of the imperial chaebol.
Then the SUV boom hit, especially in the U.S., and Hyundai only had two in its lineup – an old Tucson and a new Santa Fe. It didn’t have a big SUV or a little one. Then the Sonata redesign hit with a thud in the U.S.; customers found it boring compared to the exciting YF predecessor. U.S. market share slipped from 5% to 4%.
I always told our PR teams, ‘We’ll know we’ve made an impact when we can get journalists to stop starting their stories with some version of, ‘Can you believe Hyundai can make a high-quality car?’
Flashing forward, Hyundai’s China sales cratered because of the political problems between Beijing and Seoul, the company’s profits slipped, it missed its annual sales targets, Kia embarrassingly bypassed Hyundai in passenger car sales in the home market and, finally, South Korea elected a new president who promised to rough up the chaebols.
I think, at least in the U.S., Hyundai still enjoys a reputation as a high-quality value-for-money carmaker, but it’s losing mindshare because of its sedan-heavy lineup.
Also, the Genesis sub-brand spinoff was poorly executed; it turns out to have been a mistake not to set up a separate sales channel and Genesis dealers. Hyundai dealers aren’t committing money to promote the dealership-within-a-dealership idea of selling the Genesis. Also, there are only two Genesis models so far.
I think the company’s fortunes will turn around as it rolls out more SUVs and expands the Genesis lineup, but the key will be when Vice Chairman Euisun Chung, who went to school and worked in the U.S. and fluently speaks English, takes over for his father, current chairman M.K. Chung, who is the son of the Hyundai founder.
Euisun Chung is the man who hired Peter Schreyer and other European designers and understands that Hyundai must transition from a sales company to a brand company and from a transnational company to an international one.
What were the challenges in trying to rebrand Hyundai?
Changing the perception we made cheap, terrible cars. Brands retain good reputations far longer than they should and they retain bad reputations far longer than they should. When I arrived in Korea in 2010, it was the first year a Hyundai car (YF Sonata) made Car and Driver’s annual Ten Best list.
But in truth, the company began its quality turnaround in 1999 and had been making high-quality volume cars from the mid-oughts. The thing is, not every person is able to keep up with the evolution of every brand: they get an image of a brand and it tends to stick, good or bad.
I think the company’s fortunes will turn around as it rolls out more SUVs and expands the Genesis lineup, but the key will be when Vice Chairman Euisun Chung, who went to school and worked in the U.S. and fluently speaks English, takes over for his father.
Our job was to change that perception by bringing literally hundreds of global motoring and business journalists to Korea to see our facilities, meet our engineers and designers and executives and see how singularly devoted they were to making better and better cars.
I always told our PR teams, “We’ll know we’ve made an impact when we can get journalists to stop starting their stories with some version of, ‘Can you believe Hyundai can make a high-quality car?’ ” On the other hand, it did give us an angle to pitch, and that landed us positive front page/cover pieces in the Wall Street Journal and Bloomberg Markets.
What were the takeaways for other brands that might consider doing what Hyundai did (ie. try to move the whole brand upmarket) and what are some of the missteps they might learn from?
If you’re going to do it, you have to be consistent. You can’t spend years telling journalists, “We’re not going to split off Genesis into a sub-brand; we want to move the entire brand up-market” and then, a couple years later, split off Genesis into a sub-brand.
Yes, a nimble company must watch the market and respond to customer tastes but the flat Genesis sales since the spin-off tell me that consumers were not desperate for a Genesis sub-brand. Nor that the association with Hyundai was holding back Genesis.
We always heard anecdotally about Genesis buyers in the U.S. asking their dealers to remove the Hyundai H logo from the trunk and replace it with the winged Genesis logo, but those are anecdotes.
I once sat down at hoesik and one of my Korean colleagues slid in next to me, confessing, ‘I do not like to drink either, but if I do not, it will hurt my career.’ I was allowed to not get drunk. He was not.
If it is so important to someone that they have a three-pointed star or four circles on their grille, even a Genesis that has no visual clues that it’s made by Hyundai is going to sway them.
Genesis buyers are smart-money people. They want quality and performance but are not so insecure that they need a luxe badge on the hood. I do think that’s a profitable slice of the luxury car market.
How was the task of branding complicated by working in a cross-cultural setting as an expat?
In every way possible. Of 5,000 or so Hyundai Motor Group employees who walked into the twin-tower headquarters in Seoul each morning, there were about seven or eight non-Koreans and one American — me. And I did not speak Korean. Even though most Koreans at headquarters that I dealt with spoke and wrote English ranging in quality from pretty good to excellent, Korean was the language of headquarters. This meant I could not attend meetings with my boss and fellow executives.
Even though most Koreans at headquarters that I dealt with spoke and wrote English ranging in quality from pretty good to excellent, Korean was the language of headquarters. This meant I could not attend meetings with my boss and fellow executives.
If you look at creative for the German car brands, the emotions that are appealed to include the love of driving, performance, the feeling of technical superiority and so on. The emotions that Korean car buyers connect with tend to be softer, including prestige, romance, family and so on.
My team leader – not an executive – was placed in the uncomfortable position of having to attend meetings (Remember, Korea is a Confucian, hierarchical culture) and report back to me.
Going in, I was oblivious to many of the Korean Codes – the meanings of Han, Jeong, Noonchi and hundreds of other customs and ideas. I did not drink to get drunk, which meant I could not participate fully or frequently in the hoesik team drinking dinners that are so crucial to team bonding, and so on. I don’t like karaoke. Many of the problems I brought on myself by being, as my wife called me, an “America bomb” – loud, garrulous, direct, opinionated in a culture that was none of these.
The first six months were rough on me and on my team members. After a while, I tried to learn and fit in more.
Conversely, were there any advantages to approaching your task as a cultural outsider?
If there was any advantage, it was that I didn’t know what I couldn’t do, because I was an outsider. Consequently, I got a few things done – such as hiring an English Editor to improve the quality of Hyundai’s English copy – that no one had thought to do, or knew how to do.
And, as a foreigner, I got a bit of a free pass on some things. For instance, I once sat down at hoesik (business dinner and drinks) and one of my Korean colleagues slid in next to me, confessing, “I do not like to drink either, but if I do not, it will hurt my career.” I was allowed to not get drunk. He was not.
Hyundai has put together some impressive ad campaigns over the years. In terms of creative content and brand messaging, is there much synergy between Hyundai America and the headquarters back in Korea? In general, what is the working relationship between the two?
The bigger issues, I think, are the cultural differences in tonality. Some creative that totally hits the Korean sweet spot and resonates with buyers in Korea was found unusable by executives at Hyundai Motor America and Hyundai Motor Europe, for instance, because the audiences approach it from such a different culture. Consider the concept of emotion. All car buyers are emotional.
But if you look at creative for the German car brands, the emotions that are appealed to include the love of driving, performance, the feeling of technical superiority and so on. The emotions that Korean car buyers connect with tend to be softer, including prestige, romance, family and so on.
One of the undercurrents of the book is what you might call a rebranding of yourself, as you transitioned from a career in journalism to a career in public relations. How has your personal journey played out in that regard since leaving Korea? What have you been putting your time into lately?
The theme of the book was that Korea, Hyundai and I were all hitting our midlife crises at the same point and trying to figure out if we had Second Acts in us. For me, it was morphing from being a lifelong-bachelor journalist who had only ever lived in America to being a married global PR Executive who lived in Korea.
My wife and I returned to the U.S. in 2014 and have since had a second daughter. I work at a Washington D.C. PR agency but am still representing foreign-government clients. So maybe I’m in my Third Act. We’d love to return to Asia for a Fourth Act.
You can find out more about Frank Ahrens book, Seoul Man: A Memoir of Cars, Culture, Crisis, and Unexpected Hilarity Inside a Korean Corporate Titan, here.
